Netflix to Acquire Warner Bros. in a Landmark Deal
Netflix has announced that it has reached an agreement to acquire parts of Warner Bros. The transaction is composed of cash and stock valued at $27.75, bringing the stock value of the deal to $72 billion, for a total enterprise value of approximately $82.7 billion.
Key Components of the Deal
- Netflix will acquire Warner Bros.' film studio and the HBO Max streaming service
- Discovery will proceed with its planned spin-off of Discovery Global, which includes its vast portfolio of pay-TV channels, such as TNT and CNN
Timeline and Terms
The acquisition is expected to be finalized after the separation of the TV networks, planned for the third quarter of 2026. The companies estimate that the transaction will be completed within 12 to 18 months.
- Netflix has agreed to pay a reverse breakup fee of $5.8 billion if the deal is not approved
- Warner Bros. would pay a breakup fee of $2.8 billion if it decides to cancel the deal to pursue a different merger
Regulatory Scrutiny and Market Impact
The deal is likely to attract regulatory attention given the significant streaming activities of both companies.
- Netflix reported over 300 million subscribers as of the end of 2024
- Warner Bros. has 128 million global subscribers as of September 30
- Paramount has already raised the potential for antitrust concerns earlier this week The acquisition is expected to lead to a wave of consolidations in the entertainment industry, as other major players (Disney, Comcast/NBC Universal, Paramount) may see their stock prices drop in response to the emergence of this new giant.
